The Interstate Land Sales Full Disclosure Act is a federal law passed in 1968 with the intention of regulating subdivided land sales.
The Act requires that subdivision developers provide a buyer with a property report. Such a report includes a full disclosure of all vital information about the subdivided property. It must be delivered to a buyer before a contract or agreement is signed. The Act also allows a buyer of subdivided land to have at least seven days to rescind a purchase agreement. A seller cannot penalize a buyer for canceling the transaction. Subdivided land buyers have up to three years to report seller violations to the Consumer Financial Protection Bureau. If the original seller is found liable, severe penalties can be enforced.
Although the Interstate Land Sales Full Disclosure Act has been in place for over 50 years, the majority of legal cases related to the Act have occurred since 2007. The Great Recession played a significant role in changing the way in which courts interpret how the Act should be enforced. Regulation of the sale of subdivided land was originally enforced with the Department of Housing and Urban Development (HUD). Now, it is the responsibility of the Consumer Financial Protection Bureau.
Requirements of the Interstate Land Sales Disclosure Act
The Interstate Land Sales Disclosure Act requires landowners of 100 plus lots to provide buyers with a disclosure property statement. The disclosure property statement provides vital details regarding specifics of the lot they are buying. A property that purchase a lot that included a property statement disclosure has the ability to return the property within seven days of the purchase of the lot. In the event the buyer had the right to receive a disclosure statement, the buyer can rescind the purchase even after the seven-day period. In this instance the buyer has up to 2 years to get a refund for their home purchase.
If the seller denies your request for a refund within the allotted time, the buyer has the ability to file a consumer complaint with the Consumer Financial Protection Bureau (CFPB). The complaint should address the parties involved, applicable dates, and what happened. The complaint should specifically state that the buyer did not get the property disclosure statement prior to the purchase and that they should therefore be entitled to a refund on the purchase of the property.
